Clean Harbors (CLH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue increased 12% year-over-year to $1.53 billion, driven by strong Environmental and Field Services performance, HEPACO and Noble Oil acquisitions, and robust demand, despite SKSS segment headwinds from base oil pricing and inventory build-up.

• Net income for Q3 2024 rose 26% to $115.2 million, with diluted EPS of $2.12, and Adjusted EBITDA grew 18% to $301.8 million, reflecting margin expansion in both operating segments.

• Environmental Services segment delivered record volumes, margin improvement, and continued positive pricing, supported by the HEPACO acquisition and strong demand for disposal and recycling services.

• SKSS segment saw revenue and EBITDA growth year-over-year, but missed expectations due to market softness and inventory build-up, prompting cost reduction actions including idling the California re-refinery.

• Commercial launch of the Kimball, Nebraska incinerator is scheduled for November, expanding hazardous waste capacity and expected to ramp up over 12–18 months.

Financial highlights

• Q3 2024 revenue grew 12% year-over-year to $1.53 billion, with Adjusted EBITDA up 18% to $301.8 million and margin at 19.7%, a 100 basis point improvement.

• Net income for Q3 was $115.2 million, up 26% from the prior year, with EPS of $2.12; income from operations increased 25% to $192.3 million.

• Adjusted free cash flow for Q3 was $144.5 million, up from $114.7 million in the prior year.

• Cash and short-term marketable securities at quarter-end were $594.7 million, up from $444.7 million at year-end 2023.

• For the nine months ended September 30, 2024, revenue reached $4.46 billion, up from $4.07 billion in 2023.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA guidance revised to $1.10–$1.12 billion, representing 10% year-over-year growth; net income expected between $375 million and $395 million.

• Adjusted free cash flow guidance set at $280–$320 million, reflecting higher working capital and project spending.

• Free cash flow guidance for 2024 lowered to a midpoint of $300 million, reflecting higher SKSS inventories and delayed AR from HEPACO integration.

• Positive trajectory for profitable growth in 2025, with mid-single-digit organic revenue growth and mid- to high-single-digit Adjusted EBITDA growth expected, assuming stable macro conditions.

• Kimball incinerator launch and HEPACO integration expected to drive further growth in 2025.